Less is more, as EU plans diet for gas and power

BRUSSELS, June 22 (Reuters) - Most companies strive for
growth by increasing their sales, but European gas and
electricity companies will be obliged to cut energy sales by 1.5
percent each year under a radical plan by Europe's energy chief.

"The cheapest energy is the one we do not consume," Guenther
Oettinger's team said in a statement on Wednesday on plans to
revolutionise the way energy is sold in the European Union.

"Energy distributors or retail energy sales companies will
be obliged to save every year 1.5 percent of their energy sales,
by volume, through the implementation of energy efficiency
measures such as improving the efficiency of the heating system,
installing double glazed windows or insulating roofs," they
added.

Oettinger also called for 3 percent of public and
government buildings to be given energy-efficient makeovers each
year from 2014.

EU leaders agreed three years ago to try to improve energy
efficiency by 20 percent by 2020. That was part of a landmark
decision to cut greenhouse gas emissions to 20 percent below
1990 levels by the same date.

The aim was also to keep a lid on an energy import bill that
currently amounts to around 270 billion euros ($387 billion) a
year for oil and 40 billion euros for gas.

But Oettinger made his move after learning the EU is falling
halfway short of that goal, and will only achieve 8.9 percent
efficiency gains. [ID:nLDE7181WV]

TURKEYS VOTE FOR CHRISTMAS

While getting energy firms to cut sales has been compared to
"getting turkeys to vote for Christmas", the aim has already
been achieved via a complex mechanism known as "Energy Saving
Obligations" in countries such as Belgium, France and Britain.

Companies are allowed to achieve the savings indirectly by
paying for efficiency improvements elsewhere in society, in
return for tradable certificates to prove they have met their
obligation.

The proposal will need to be approved by the EU's 27
governments and the European Parliament before it becomes law.

If reached, the EU's 20 percent efficiency strategy would
reduce consumption by the equivalent of 368 million tonnes of
oil in 2020, compared to projected consumption in that year of
1842 million tonnes -- worth a lot of money.

But while most investments in energy efficiency are quickly
recouped, Europe's economic crisis has worsened a widespread
aversion to upfront spending.

To get round that, the Commission's new strategy will seek
to reinvigorate an existing system of Energy Service Companies
(ESCOs), which aims to harness the power of the private sector
by grouping buildings such as schools and hospitals into
sizeable renovation projects.

ESCOs would share the upfront investment in return for a
long-term share of the money saved on energy bills.